Unemployment Rate Forecast to Drop Below 20% This Year

According to the latest report published by the International Organisation for Work (OIT), the unemployment rate in Spain will finally drop below 20%, to 19.5% in 2016.

The rate currently stands at 21.2%, and is expected to fall almost 2% this year, while only reducing by a further 0.2% in 2017 to 19.3%.

While the unemployment rate is clearly in descent, the report also adds that it will still be another 10 years before pre-crisis levels are reached.

What’s more, the OIT has calculated that the creation of new jobs will only grow 0.9% this year, and remain at the same rate in 2017.

At the same time, the active population, those that are of working age, will fall slightly to 58.2% of the population this year, and 58% the year after. Nevertheless, productivity will increase 1.7% in 2016 and 2.2% in 2017.

A spokesperson for the OIT has declared that the economic recovery and growth in Spain “is real”, and because of it employment levels are being reduced. This is all happening in an extremely positive environment of low interest rates and minimal petrol prices, which also have an effect on the labour market.

However, he also remarked that the challenges faced by this country continue to be pretty major. Things like the lack of permanent contracts and work positions, youth unemployment and the poor quality of many jobs in Spain are amongst the worst in the developed world, and need to change.

It seems that although the economy is recovering and the unemployment rate is falling, socially, many Spaniards are at their lowest. Thousands are on the poverty line, including those with a job, job security is minimal and many cannot even afford the basic necessities in life.

It is up to the Government, say the OIT, to tackle and do away with poverty, particularly as since 1 January 2016, the United Nations’ sustainable development goals came into force, with the first one being to rid the world of poverty, in all its forms.

Spain has been advised to increase the inter-professional minimum wage 10% to 720,70 euro a month over the next three years as one of the ways of combating social poverty in the country. If this is done gradually, as in the UK and Germany, there should not be any negative repercussions on the economy or the creation of new jobs. This action could, in fact, increase internal demand and help towards economic growth.

Source: www.europapress.es